Thai AirAsia merger grounded till 2027
The consolidation of AirAsia (AAB) and AirAsia X (AAX) might be a lengthy affair, extending up to 2027, according to Executive Chairman Tassapon Bijleveld.
The merger, aimed at creating a powerhouse in the industry, faces delays as AAX grapples with its ongoing rehabilitation process.
Last week, AAX made a revelation on the Malaysian stock exchange, announcing a non-binding letter of intent to acquire AAB and AirAsia Aviation Group (AAAGL) from Capital A. The master plan is to amalgamate the airlines under AAB and AAAGL into one.
AAB operates AirAsia (AK) out of Kuala Lumpur International, while AAAGL commands AirAsia Cambodia, Indonesia AirAsia, AirAsia Philippines, and Thai AirAsia, in collaboration with local partners.
However, the merger faces a potential hiatus as Tassapon revealed to The Nation that the status quo for these two entities may persist until as late as 2027.
“The merger of two airlines in Thailand may have to wait two to three years until AAX leaves the business rehabilitation plan, which should happen around late 2025.”
Thai AirAsia sought refuge in bankruptcy protection in May 2022, citing its need to better manage debts incurred during the pandemic’s early stages, reported Ch-aviation.
Presently, AAX holds a 49% stake in AAX, with the remaining shares owned by Thai investors. The proposed acquisition would see AAAGL’s 43% stake in AAB transferred to AAX. Additionally, external Thai-based investors own a 38% stake in Thai AirAsia, while the airline’s board and management, including Tassapon, retain the remaining 19%.
Despite the complex restructuring, AirAsia’s founder and Capital A CEO, Tony Fernandes, asserts that divesting the airline businesses makes complete sense. Fernandes, who will continue to have significant stakes in AirAsia carriers through his other investment vehicles, is buoyant about the future of the Thai-based AirAsia brands. He envisions transforming Bangkok into a global aviation hub.
“We want to make Bangkok the next Dubai in terms of being a global aviation hub.”
